International Capital Mobility Essay examples

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International Capital Mobility

“Globalization is today's reality. Like it or not, the move to a world economy is a fact of life. At some point in the 1990s the process achieved critical mass and people started to sit up and take notice. Many were apprehensive.

Today, almost all of us are aware that our lives are being shaped by an interconnected world economy of cross-border flows of trade, finance and technology. In our hearts, we know that there is no going back.”

-Maria Livanos Cattaui, Secretary General of the International Chamber of Commerce. As evidenced by the above quotation, any analysis of the central economic issues of our time is incomplete without a clear understanding of the increasing
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They claim that international capital mobility, or, the ability of investors to freely allocate capital around the globe, engenders promise, while simultaneously entailing peril. This paper will attempt to address the arguments of both sides to foster greater comprehension.

Before proceeding it is crucial to define the term “capital”. According to the Merriam Webster Dictionary, it is “invested savings used in the process of production, or money used to bring in income.” Investors around the world hold various assets to earn economic returns. The funds they loan out finance growth and development of economies abroad. It is their hope that they correctly allocate their wealth so that they can profit from sound investment. Emerging economies, nascent industries, etc. hope that they receive adequate funding to facilitate their development. Without it, they would stagnate and collapse. Capital is the lifeblood of an economy; its significance to economic growth cannot be overestimated or overstated.

Having said this, it is necessary to observe the consequences of the global movement of capital, i.e., the liquid lending and borrowing that keep economies afloat.
History presents many examples of the bounty it creates. For example, during the nineteenth century, capital flows were responsible for the development of the western
United States, Australia, New Zealand, Chile, South Africa, and parts of Canada.1
Opponents, while concurring

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